The bond issue being discussed is for $27 million dollars with net proceeds of $26 million. This 26 million is divided into 10 million for working cash bonds and 16 million for build America or capitol bonds. Bonds can be issued without voter approval. This is also known as a back door referendum.

The bond issues will nearly double our debt from $63,000,000 to $114,000,000. This approximate $51,000,000 includes the bonds and the interest over the life of the bond. This is a $51,000,000 tax increase over 20 years to all D15 tax payers.

The following information pertains to the $10 mil Working Cash Bonds discussed above if they are issued.

Issuance of these bonds may lower our credit rating. This will make further bond issuances more expensive.

These bonds will reduce the number of future financing options.

Taxpayers will pay a 5.519% interest rate. We will earn only .57% from the bank with current rates.

Taxpayers stand to lose $500,000 per year with current rates. This is probably the worst time in history given the yield curves for this type of financing. *

The issuance of the bonds will not solve the deficit problem and will take away funding options in the future.

These bonds will gamble on future CPI increases which may reduce our fund balances.

We don’t have any legal borrowing capacity left (previous boards maxed out our debt) we must pay $701,000 in penalties to refund our existing bonds. **

In addition, we will pay almost $400,000 in transaction fees.

* http://www.smartmoney.com/investing/bonds/the-living-yield-curve-7923/
This site has a great graphic illustrating the yield curve. Right now bonds are low on the left side of the graph and high on the right side of the graph and this is not a time when you would want to issue a bond at long term rates while earning interest at low short term rates. We want to be low on the right side of the graph and high on the left side as this would generate a better return for this type of bond.

When funds are needed, due to late tax collections from the county, we can issue a short term loan called a TAW or Tax Anticipation Warrant. We only pay interest for a short period of time which is much less expensive. We may not even need to take these out for a few years if the county is on time with payments.

The following information pertains to the $16 mil Build America Bonds or Capitol bonds discussed above.

We only have $7.5 million slated for capital projects for the next three years.

Due to poor fiscal management this is a valid option for funding up to the $7.5 mil. This may be a good option if the majority of the board does not approve skimming off the subsidy and transferring it to the operating fund.

The Build America Bond program provides a subsidy to the taxpayer to lower the interest amount by issuing a rebate.

Some may try to redirect those rebates to the operating fund and thereby charge the taxpayers a higher rate than they would have had without the subsidy. Most will find this practice unethical.

Build America bonds are taxable as opposed to bonds used for capital which would be tax exempt. With the subsidy going towards the retirement of the bonds they would have a lower interest rate than tax free bonds. If not, tax exempt bonds would offer a better rate.

Q&A

What is the difference between TAW's and Working Cash Bonds?
The difference between TAWs and working cash bonds is that we only pay interest on TAWs if we use them, but we are guaranteed to pay the interest on the bonds. - in other words, we pay, whether we need the working cash or not.

Will issuing or not issuing these bonds affect my child's education?
No. This is about financial structure and strategy and only affects how much the taxpayer will pay. It is analogous to taking out a $100,000 second mortgage for 5.5% and putting it in the bank earning 1/2%.

Are there any time constraints to issuing the working cash bonds?
No. While interest rates are historically low the difference between what we are earning and what we will be paying in interest is much greater. This creates a greater loss.

What about the Build America Bonds or Capitol Bonds?
The only time constraints pertain to the BAB or capitol bonds. We have at least until 12-31-2010 to issue the bonds without losing the stimulus rebate. The BAB's may have future refinancing constraints.

Why is the interest rate so high for the working cash bonds?
These bonds are taxable. The government does not view the use of these bond's proceeds as worthy enough for tax free status.

Is this a normal bonds issue?
No. It is normally used for districts in serious financial distress. Currently, our district has the highest rating by the state regarding our financial condition. This will change if we don't fix our business model. We are projected to spend much more than we are receiving in the coming years.

Contact your School Board members and ask them to reconsider this action. Please be respectful when communicating with the district or board members.

Note: The information above is accurate to the best of my knowledge. It is based on the information presented at the March 10th Board of Education Meeting and the resolution signed by the Board.

Thank you to everyone who voted for me in this election. The election results were very close and every vote mattered. Your support and confidence in me is greatly appreciated.

Over the next four years I will represent you, your children, and this community to the best of my ability and I will put the needs of our children first. Fiscal responsibility and a world class district can go hand in hand.

I believe in open and honest communication so please feel free to contact me at any time to discuss any concerns you may have in the upcoming years. Going forward I would like to invite everyone to visit my new and informative web site www.electmillar.com. My plan is to update this web site every Friday with information regarding district issues, school board issues, and votes. It will offer a quick way for everyone who is interested to get a quick update on what is going on in District 15. This web site will be up and running by mid-May.

It is hard to believe that 4 years have gone by so quickly. Yet here I am running for re-election and once more seeking your vote. It has been a busy 4 years. As a board member, I am responsible for representing the entire district community. To understand the dynamics of this community and its changing needs, I have taken the opportunity to visit every school multiple times. This helps me to get a better understanding of the specific needs and challenges each school faces and enables me to make informed votes. I am dedicated and committed to District 15 and I take my role as board member very seriously.

I ran for the school board in 2005 for the same reasons I am running again today - because I am confident that my 25 years of business and financial experience can greatly benefit our district.

In the past 4 years, the district has faced many tough financial challenges and tough decisions had to be made. In the upcoming years however, we will be facing even tougher challenges and decisions with the current economic climate. With your vote on April 7th, I can continue to fight on your behalf for true fiscal leadership and responsibility while helping to improve the world class district our children attend and our community depends on. We can provide our children with 21st century skills in a world class learning environment and still be fiscally responsible.

Please support my re-election efforts. I am independent and I vote for or against issues and not people.

For details on my voting record and position on issues, I invite you to please see the Issues section of my web site or the districts web site meeting minutes.